Energy & Environment
The Line Up
- EPA is moving forward with 31 major economic rules and 172 major policy rules, an unprecedented level of regulatory action.
- EPA has garnered significant attention in recent years by issuing a series of one-sided, politically-charged regulations that are intended to take the place of legislation that cannot achieve a consensus in the Congress. From greenhouse gases to Clean Water Act jurisdiction to chemical regulation, EPA has not been shy about using regulations to impose broad mandates and restrictions so controversial that they could not pass even the heavily-Democratic 111th Congress.
- Between “Sue and Settle” rulemakings, statutory obligations, and other rules in the pipeline, EPA will continue to throw a massive number of new rules and regulations at industry over the next few years.
- A flawed permitting process for energy projects is responsible for roughly $560 billion in lost private energy investment and 250,000 jobs.
- The cumulative impact of regulatory action can be overwhelming: agencies literally have the power to decide the fate of firms and entire industries.
The drilling moratorium off the Gulf Coast has cost 20,000 jobs in Louisiana alone.
Project No Project
One of the promises in the development and deployment of new energy technologies is the creation of “green jobs,” and it is a promise we embrace. But the sad fact is all too often these “green jobs” run afoul of “green tape.” Even more unfortunate is that many of the same groups who are thinking globally are often acting locally to stop the projects that would create jobs and reduce CO2 emissions.
Increasing Environmental Regulations
The Executive Branch agencies and offices tasked with environmental issues—the Environmental Protection Agency (EPA), the Council on Environmental Quality (CEQ), the Department of the Interior (DOI) and others—are undertaking a wide range of new rules and regulations that either tighten existing environmental standards or impose entirely new environmental obligations on the business community. Often, these agencies give little or no consideration to the cost on businesses or jobs that might be lost. American businesses are increasingly suffocated by the volume, scope, and cost of all of these new regulations.
Here Comes the EPA
EPA is currently working on over 30 regulations whose implementation will cost industry over $100 million:
- Criteria and standards for cooling water intake structures
- National primary drinking water regulations: radon
- Numeric nutrient criteria for Florida’s Lakes and Flowing Waters
- CERCLA financial responsibility requirements for classes of facilities in the hardrock mining industry
- Standards for the management of coal combustion residuals generated by commercial electric power producers
- Revising underground storage tank regulations—revisions to existing requirements & additions to incorporate the provisions of Energy Policy Act
- Oil pollution prevention: spill prevention, control, and countermeasure rule requirements – amendments for milk
- Review of the NAAQS for carbon monoxide
- Review of the NAAQS for particulate matter
- Review of the secondary NAAQS for oxides of nitrogen and oxides of sulfur
- Implementing periodic monitoring in Federal and State operating permit programs
- NESHAP for coal- and oil-fired electric utility steam generating units
- Control of greenhouse gas emissions from medium- and heavy-duty vehicles
- Review of the NAAQS for lead
- NESHAP for major source industrial, commercial and institutional boilers and process heaters
- NESHAP for area sources: Industrial, commercial and institutional boilers
- Transport rule (CAIR replacement rule)
- NSPS/Emission Guidelines (EG) for Sewage Sludge Incinerators
- Reconsideration of the 2008 ozone NAAQS
- Review of the NAAQS for ozone (the next NAAQS, not the one under reconsideration)
- Residual risk and technology review amendments to the secondary aluminum production NESHAP
- Review of primary NAAQS for sulfur dioxide
- NESHAP: Portland Cement notice of reconsideration and NSPS for Portland Cement
- Review of NSPS – Portland cement
- EPA/NHTSA joint rulemaking to establish light-duty greenhouse gas emission standards and CAFE standards
- Prevention of Significant Deterioration/Title V Greenhouse Gas Tailoring Rule
- NESHAP for reciprocating internal combustion engines – existing stationary spark ignition (gas-fired)
- Lead: renovation, repair and painting program for public and commercial buildings
- Lead: clearance and clearance testing requirements for the renovation, repair and painting program
- Lead: amendment to the opt-out and recordkeeping provisions in the renovation, repair and painting program.
These are in addition to the following large, complex, costly regulations EPA has already finalized over the past two and a half years:
- Waiver to California to regulate greenhouse gas emissions from automobiles
- Endangerment finding for greenhouse gas emissions
- “Johnson Memorandum” regarding regulation of greenhouse gases under the Clean Air Act
- Light-Duty Vehicle greenhouse gas emissions standards for model years 2012-2016
- Chesapeake Bay Total Maximum Daily Loads (TMDLs)
- Retroactive veto of Spruce Mine No. 1 Clean Water act permit
- Reconsideration of the definition of solid waste under RCRA
The Line Up
- The 2,300-page financial regulatory reform law will require thousands of pages of implementing regulations.
- A Chamber review of the law discovered that it calls for nearly 500 regulatory rulemakings, 60 studies, and 93 reports. By contrast, the Sarbanes-Oxley corporate governance legislation passed in 2002 required only 16 rulemakings and 6 studies.
On July 21, 2010 President Obama signed The Dodd-Frank Wall Street Reform and Consumer Protection Act into law. More than 2,300 pages long, this legislation is the most expansive rewrite of the financial regulatory structure in decades calling on federal and state regulators to enact nearly 500 new rules and conduct dozens of new studies and reports. This chart shows each rule, by agency that the regulators are mandated or authorized to enact. More than 60 rules have to be proposed and implemented jointly among many regulators.
Consumer Financial Protection Bureau
Dodd-Frank established the new Bureau of Consumer Financial Protection (CFPB). This new agency will be one of the most powerful in decades – with a single director that has unchecked authority and a dedicated budget of over $500 million without being subject to the appropriations process or oversight by Office of Management and Budget. It will have broad authority that stretches far beyond the financial services industry – and will impact nonfinancial companies, not primarily in the business of consumer finance. By design, the CFPB will push the market towards only standard, low risk products; reduce the choices available to consumers and small business owners; and drive up the costs of available credit. The agency has a key choice between enforcing consumer laws and improving consumer disclosures or using its unprecedented powers to restrict consumer choices, limits consumer credit, or otherwise politicize the allocation of credit.
The Securities and Exchange Commission Rules on Proxy Access
Dodd-Frank gave the SEC the authority to promulgate rules providing for proxy access. On August 25, the SEC announced it would adopt changes to the federal proxy and other rules to facilitate director nominations by shareholders. Now shareholders are eligible to include nominees in the proxy materials if they own at least 3% of shares for at least the prior three years. After conducting legal analysis, the Chamber and the Business Roundtable (BRT) have joined together to file a lawsuit to overturn the Proxy Access rule on September 29, 2010. A final decision by the court is expected Summer 2011.
» U.S. Chamber's press release
» Additional information about Proxy Access (PDF)
» What Other People are Saying about Proxy Access (PDF)
» U.S. Chamber and BRT Motion for Stay (PDF)
» Filed Petition (PDF)
OTC Derivative Regulation
While Dodd-Frank will achieve the objectives of increased transparency and reduced systemic risks, the strength of the end-user exemption will be decided by the SEC and the CFTC through the significant authority granted to them by Congress. Key terms that will be defined by rules will shape the how companies mitigate their risk. A narrow interpretation could result in end-users that are hedging, and not speculating, to fall under a bank-like regulatory regime. In addition, should the agencies impose substantial new costs on end-users – either directly or indirectly through their counterparties, they will significantly disincentive hedging by companies across the country, and will result in more, not less, risk in the system.
Dodd-Frank created the Financial Stability Oversight Council (FSOC) to monitor systemic risk. Key issues include how the FSOC will be structured, what input businesses will have, what information will be required and the structure of the subsequent compliance regimes, and how companies and industries will be deemed to be “systemically significant.”
Dodd- Frank gave the SEC additional regulatory enforcement powers to draft new rules to increase protections and incentives for whistleblowers. These new rules, finalized on May 25, 2011, will financially incent employees to circumvent a company’s internal complaint process and report the issue directly to the SEC by awarding the whistleblower between 10 and 30 percent of total monetary sanctions. Click here to read the Chamber’s statement.
- Thousands of pages of new regulations aimed at individuals, businesses, health care industry providers, and states will be issued to implement the 2,500-page health care law.
- The law’s long implementation time frame (some provisions don’t kick in until 2018) makes business planning difficult.
The Health Care Law – The Details
In the new health care law, excluding the tax provisions, there are 41 provisions that explicitly require, permit, or contemplate rulemakings by federal agencies to implement the law.
Of these 41 rulemakings, there are 25 regulations which are mandatory, 9 which are discretionary, and 7 other provisions which state either in “accordance with regulations of the Secretary,” or “under regulations issued by the Secretary,” leaving much room for regulatory discretion.
There are approximately 100 additional provisions, where it seems likely that the Departments of Health and Human Services, Labor, and Treasury will issue some type of regulatory guidance.
The law also mandates 38 studies and 59 evaluations for a total of 97, and 129 reports (interim reports and final reports are counted separately).
Additionally, the tax title provisions for the law leave room for discretionary regulation in its language 13 times, with language like, “In such manner as the Secretary may prescribe;” Secretary may waive;” “Secretary determines;” “Secretary shall review;” “Secretary shall calculate;” and “Secretary shall require.”
- The Labor Department is considering several burdensome policies, including a new record-keeping regulation pertaining to employee classification.
- The Occupational Safety and Health Administration is moving forward on an expansive safety and health program regulation that could require businesses to revamp their existing programs.
- Meanwhile, the newly appointed National Labor Relations Board is expected to make sweeping changes in rules governing every facet of union-management relations.
- Total Rules on Current Regulatory Agenda: 100
Number of critical rules: 25
- Immigration – 2
- Pensions – 10
- Labor and Employment – 13
Equal Employment Opportunity Commission
- Total Items on Current Regulatory Agenda: 8
- Number of critical rules: 4
Federal Acquisition Regulations Council (FAR Council)
- Total items on Current Regulatory Agenda: 47
- Total items on Current Regulatory Agenda with labor implications: 2
- Number of critical rules: 2
Labor-Related Sub-Regulatory Statistics
There are 19 sub regulatory initiatives we are keeping close watch on. This list includes, primarily initiatives from DOL, but also one each from IRS, DHS, and EEOC.